Indicators of Wealth?

[clobber]

Quote:

Originally Posted by ABQ2015 Well, good luck on this thread. We had a similar one on another forum and it just ended up being a big bashing of people who spent too much money on frivolous things because they must be up to their neck in debt, all the truly wealthy people were frugal and never talked about their money or displayed their wealth, true wealth was being happy and with family, blah, blah, blah. Anyone who played along was accused of being superficial. Sort of like bling.

Yeah - we will see. Sometimes the Internet is a hard sad place. HA!

[clobber]

Quote:

Originally Posted by Bestwifeever A fine line imo using the above qualifiers between wealthy and being a snob. Only a snob would care if someone likes to eat at Denny's, again imo.

Fair point and maybe I should not have called out a specific place. My point was to give a typical example of a place where someone might eat just because it is cheap.

[NW-Bound]

Quote:

Originally Posted by Tadpole My chauffeur drives me to Denny's for the AARP discount.

But to be truly rich and generous, I would invite my chauffeur in for a dinner with me.

[clobber]

Quote:

Originally Posted by DrRoy +1 I agree. You could be buying on credit. I read once that the wealthy pay less than 2% of their NW in income taxes per year.

Well for the purpose of this discussion I'm talking about "the wealthy" and not buying on credit. Assume you have $2M in liquid assets and can get your hands on $200 or $100K out of those accounts immediately.

I'm not saying the wealthy don't use credit.

[clobber]

Quote:

Originally Posted by daylatedollarshort We decided our price point for good food is about $10 a meal per person. We can get tasty Thai, Vietnamese or Indian lunch specials for that price and have never found anything we felt was tastier or healthier. I had the chance to get some discount tickets to a foodie event in the city last year with chefs from Michelin starred restaurants. The event was a lot of fun and in a skyscraper with pretty views. But we realized the food we thought was best were the Asian dishes and we can get those close to home and without paying much.

Now I'm hungry!

Agreed on those counts. So - let me guess. You would not have gone to the foodie event had it not been for the discount tickets? I'm thinking a #3 category person that I described would absolutely go for discounts, but would not give a second thought to paying full price.

I don't care what category anyone here fits into. Just trying to identify those behaviors, indicators, or "splurges" of a cat 3 person.

[socca]

Quote:

Originally Posted by clobber So, what are some specific activities that might indicate a person is wealthy?

Any particular expenditure can only be properly understood within the context of a person's overall income, expenses, and assets. So, I would argue that the 'information value' of any particular expenditure is rather low.

BTW, my mother likes to eat at the Golden Corral all-you-can-eat buffet, which hardly caters to the 1%. So, you really can't infer anything from a person's dining-out preferences.

[RobbieB]

I look at it as "having more fun" and doing what I want to do.

I still do a lot of DIY and not because I'm trying to save money, but because I like building stuff and I can design it exactly how I want it.

I've always loved east coast seafood, but it was a long time between trips to the east coast. So now I just FedEx the stuff whenever I get the urge.

I've always loved motorcycles but never bought anything that cost over 10 grand. That BMW was twice that and I can afford it and just wrote a check. But it's one of the best sport tourers there is.

So that's my plan. Do what I want and what I like and just have fun!

[daylatedollarshort]

In The Millionaire Next Door book, the first time the authors did a focus group with millionaires worth $10M or more, this is what happened:

"The first multi-millionaire to arrive was offered a glass of wine -- very expensive 1970 Bordeaux. He replied, "I drink Scotch and two kinds of beer — Budweiser and Free!" By the end of the two-hour focus group, not a single person had touched the pate or the vintage wines.
The book continues with, "Today, we are much wiser about the lifestyles of the affluent. When we interview millionaires these days, we provide them with coffee, tea, soft drinks, beer, scotch and club sandwiches. Of course, we also pay them between $100. and $200 apiece."

Source:
http://www.alanrosenspan.com/recent_pubs/marketing_affluent.html

[Bestwifeever]

Quote:

Originally Posted by clobber Fair point and maybe I should not have called out a specific place. My point was to give a typical example of a place where someone might eat just because it is cheap.

If we wanted pancakes we might go to Denny's (we actually never go to Denny's because there is an awesome diner under a half mile from our house with mighty fine breakfasts), but cost isn't a factor in that decision. One thing we have been surprised and happy about is that cost isn't a factor in most of our decisions any more, so we feel wealthier now, compared to previous stages of our lives (we are not making decisions like buying an airplane or a second home).

[RunningBum]

Just a few minutes ago I splurged on a not-quite 2 hour direct round trip domestic flight, paying $329 instead of $249 to leave mid day rather than 7am, and to fly economy plus outbound and first class return. Probably not quite a wealth indicator but it's nice to not have to scrimp for the lowest fare.


International business class would probably be a good indication to me. I have a couple of very long international trips I'd like to do but I hate the idea of being cramped on planes for so long. The price diff of economy/plus/business is $1000/2500/4000 on a quick check today. Hard to justify an extra $3000, but on the other hand I just can't see putting up with flying cattle class for extra long flights, so it might come down to whether I'm willing to pay $2500 or $4000 rather than $1000 in airfare to take such a trip. So I guess if I didn't blink at that I probably would consider myself wealthy, instead of what I'd call "wealthy enough".

[RobbieB]

Nope, no airplanes for me either -

But I will have a boat on the Delta.

Not getting a new house, this one is paid for, but I'm painting now and soon all the flooring will be replaced with 1st class stuff.

The important thing is to go "large" on the stuff you want to go large on -

[clobber]

Quote:

Originally Posted by socca Any particular expenditure can only be properly understood within the context of a person's overall income, expenses, and assets. So, I would argue that the 'information value' of any particular expenditure is rather low. BTW, my mother likes to eat at the Golden Corral all-you-can-eat buffet, which hardly caters to the 1%. So, you really can't infer anything from a person's dining-out preferences.

I think that is what I am asking. I mean, you are right that any particular expenditure can only be understood within the context. So, what I am asking is: What particular expenditures would (or might) indicate that a person is in a wealthy context.

[6miths]

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Originally Posted by GravitySucks When I go to the local burger joint I order the Cowboy Burger, but pay them a quarter to replace the Jack cheese with sharp Cheddar.

And I take my own real maple syrup to Denny's! (Or anywhere serving anything to which it might be applied - maybe even Cowboy Burger!!)

[clobber]

Quote:

Originally Posted by RunningBum Just a few minutes ago I splurged on a not-quite 2 hour direct round trip domestic flight, paying $329 instead of $249 to leave mid day rather than 7am, and to fly economy plus outbound and first class return. Probably not quite a wealth indicator but it's nice to not have to scrimp for the lowest fare. International business class would probably be a good indication to me. I have a couple of very long international trips I'd like to do but I hate the idea of being cramped on planes for so long. The price diff of economy/plus/business is $1000/2500/4000 on a quick check today. Hard to justify an extra $3000, but on the other hand I just can't see putting up with flying cattle class for extra long flights, so it might come down to whether I'm willing to pay $2500 or $4000 rather than $1000 in airfare to take such a trip. So I guess if I didn't blink at that I probably would consider myself wealthy, instead of what I'd call "wealthy enough".

I think both of your examples qualify as indicators on different scales. Nice.

Why are you blinking on the $1000/2500/4000? Is it being frugal? Can you just barely afford the $4000? Is it just knowing you can get there for $1000K?

Just wondering

[Walt34]

Plumbing and me do not play nice together, and I'm rich because whenever there's a plumbing problem, I just call a plumber.

[Sojourner]

Quote:

Originally Posted by daylatedollarshort In The Millionaire Next Door book, the first time the authors did a focus group with millionaires worth $10M or more, this is what happened: "The first multi-millionaire to arrive was offered a glass of wine -- very expensive 1970 Bordeaux. He replied, "I drink Scotch and two kinds of beer — Budweiser and Free!" By the end of the two-hour focus group, not a single person had touched the pate or the vintage wines. The book continues with, "Today, we are much wiser about the lifestyles of the affluent. When we interview millionaires these days, we provide them with coffee, tea, soft drinks, beer, scotch and club sandwiches. Of course, we also pay them between $100. and $200 apiece." Source: http://www.alanrosenspan.com/recent_pubs/marketing_affluent.html

Just wanted to say how much I love that book and how I really believe reading it (multiple times) set me on the LBYM path to the magical land of FIRE. And btw, if I had been in that focus group I would've gladly accepted the glass of vintage Bordeaux and then asked politely for a refill (or two).

As for wealth indicators, I think it's all somewhat relative, but I'd have to agree with things like splurging for $3000 business class tickets on an int'l flight. For me, that's kind of the definition of a wealthy splurge. But... it's not hard to imagine someone of middle-class or lower means doing that, too. It seems like many non-wealthy people spend lavishly and extravagantly on certain things occasionally. This was a big point in The Millionaire Next Door... the whole "big hat, no cattle" lifestyle. Perhaps a better wealth indicator would be the ability to consistently spend $3000 for business class seats on every international flight over the course of many years, with no significant impact to your financial health or net worth.

[daylatedollarshort]

Quote:

Originally Posted by clobber Now I'm hungry! Agreed on those counts. So - let me guess. You would not have gone to the foodie event had it not been for the discount tickets? I'm thinking a #3 category person that I described would absolutely go for discounts, but would not give a second thought to paying full price. I don't care what category anyone here fits into. Just trying to identify those behaviors, indicators, or "splurges" of a cat 3 person.

I would not have gone to the foodie event at full price. There are a lot of fun free and cheap things to do in our area plus we have assorted memberships in senior clubs, nonprofits and seat filler subscriptions, so every week we usually have to more discount and free event options than we have time to go to anyway.

[RobbieB]

Yup, that's one of mine -

When I spent 3X the coach fare for the girlfriend and I to go to Detroit for my buddies daughter's wedding I cringed. 3X times 2. Money down the drain. But hey, I don't like flying (lotta past business travel) and it was nice getting the "first class treatment" as well as the big seats.

Never coach again -

[happy2bretired]

I think I'm a #3. Every year I tend to do or buy something that I consider "fun" for me and probably frivolous to most on this board.

I'm not rich but I am comfortable in my paid off home, in a low cost of living, mid sized city. I have a budget, I owe no money to anyone and I spend on what makes me happy.

I've purchased:
Pilates apparatus, rowing machine
Travel (Germany, Brazil, cruises)
New furniture (I have a small modest home so not much furniture is required) including 2 Stressless recliners and a Hancock and Moore leather sofa
I pay for streaming services that I enjoy
I buy whatever I want at the grocery store
I seldom eat out, but when I do, I try to include my family and don't worry a bit about the cost.

I find things to spend on that probably no one here thinks is right for them but it is for me and I'm very content with what I have.


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[Music Lover]

I retired debt free at 53 and rarely worry about price tags on any item under $1000 as long as I know it's a good deal. For me, that's wealthy.

I know people up to their ears in debt that would never set foot in a Denny's because they feel that they are "above" that level of restaurant, but they will drop $200 that they can't afford on a regular basis at a well known higher end restaurant.

I also have a good friend worth at least $10 million that goes to breakfast specials with me, and we will share coupons to get reduced rates on golf.